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Gold Price Forecast – Gold Markets Continue to Look to the Upside

By:
Christopher Lewis
Published: May 10, 2023, 14:08 GMT+00:00

Gold markets have rallied after initially pulling back ahead of the CPI number.

Gold, FX Empire

In this article:

Gold Price Predictions Video for 11.05.23

Gold Market Technical Analysis

Gold markets have initially drifted lower during the trading session on Wednesday, but then turned right back around to show signs of life after the CPI came in a little cooler than anticipated. With this being the case, the market is likely to continue to see more of a “buy in the dip” attitude, which has been the case for some time. The $2000 level underneath has a lot of psychology attached to it and it does make quite a bit of sense that gold will continue to attract buyers on dips anytime we get close to that level.

Just above, we have the $2100 level as an area that a lot of people will be paying attention to as a major resistance barrier. With this, I think it is a situation where if we can break above there, then Gold can really take off. At that point, it would become more or less a “buy-and-hold” type of market. This course does make sense if we have a lot of economic concerns out there, as gold is a major asset for people looking to protect their wealth.

The 50-Day EMA is racing toward the $2000 level as well, so the technical set up does look very positive, but if we were to break through those 2 levels, then you have to start to think about shorting the market. This would obviously need a very strong US dollar and interest rates screaming. Ultimately, even though there is typically a negative correlation between the gold and the US dollar markets, the reality is that both can go up at the same time, as it is typically a sign that everybody is running for cover. With this, I don’t read too much into the correlation and it’s worth noting that the correlation has broken down recently. That does happen from time to time, so don’t get stuck in that narrative.

Regardless, I have no interest in shorting this market anytime soon so as long as that’s going to be the case it’s only a matter of time before I find a dip that is attractive enough for me to start taking on more exposure to an already sizable position.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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